Lack of info in Dow Styron sale to Bain shows confidence returning to m&a

Lack of info in Dow Styron sale to Bain shows confidence returning to m&a. Follow this link to story:
http://www.icis.com/blogs/east-european-chemicals/2010/03/lack-of-info-in-dow-styron-sale-to-bain-shows-confidence-returning-to-ma.html

Wilton rescue a step closer, Dow plant probably still to close

At last it seems like the folks in charge at Wilton and those in high places at a national level may have generated a rescue plan with some teeth. But is it too little, too late, for the Dow ethylene oxide (EO), ethylene glycol (EG) plant up there?

Individual segments of a ten point plane have been assigned to industry champions (see below). The Dow plant is scheduled for closure in January and this plan is still light on specifics about alternative uses for this plant.

The problem is that there must be a private sector solution for this Dow plant. As a government advisor told me at the recent Chemical Industries Association (CIA) annual dinner in London, the state cannot keep this plant alive. No private sector company has offered a viable solution to date, he added.

Stan Higgins at NEPIC was very pessimistic about the future of this plant a few weeks ago and I have seen no statement from him to contradict that.

The 10 point plan seems more like long term goals than short term solutions. Let's hope the plan comes to fruition prtetty quickly.

Here are the 10 points:

• Innovation - Developing new technologies and innovative capacity in areas vital to the future of the process industries, particularly low carbon as well as energy and feedstock from waste, industrial symbiosis, resource efficiency and recyclable materials. (Industry champion: Steve Bagshaw, Avecia)

• Carbon Capture and Storage (CCS) - Vital to the future sustainability and competitiveness of the process industries. A commitment sought with Government to develop, design, engineer and build a world first CCS system encompassing power generation and industrial emissions for Tees Valley, to help sustain existing businesses and attract new investment. (Industry champion: Phil Bailey, Lucite)

• Future of Ethylene Oxide/ Ethylene Glycol Plant - Build on current work to develop a viable, market-based solution for the future sustainability of this facility. Such a solution is possible but may take several months to complete and Government is asked to assist in ensuring these facilities remain available to a potential investor. (Industry champion: Stan Higgins, NEPIC)

• Energy Efficiency - Develop innovative solutions to reduce the current energy use of industry in Tees Valley, including schemes to share energy generation and use. (Industry champion: John Shipman, Huntsman)

• Training - Securing high grade skills through the current downturn is vital for the long-term success of the process industries. Work with Government to widen a fund to ensure that engineering apprentices can be supported until the end of 2011 to meet industry needs. (Industry champions: George Ritchie, Sembcorp and Robin Davison, Wolviston Management)

• Supply Chain Development - Work with the supply chain to assist them to develop new capabilities for diversified applications. Request that Government encourage business support organisations to recognise the strengths and opportunities facing the supply chain, and help in its development. (Industry champion: James Robson, Exwold)

• Feedstocks - New, lower carbon feedstock is vital for the long term success of the process industries. Take forward projects which examine new feedstocks, and, where appropriate, bring them to industrial application. (Industry champions: Mike Buchan and Andrew Teague, Sabic)

• Teesside Infrastructure for New Investment - In support of the findings of the North and South Tees Study, industry will review in detail the key infrastructure requirements and work with the public sector to deliver these actions. (Industry champion: Paul Gavens, Sembcorp)

• Marketing Tees Valley for Future Investment. Industry will champion and continue to market Tees Valley as a global chemical and process industry hub. (Industry champion: Paul Booth, Sabic)

• Improved Partnership Working - Improve links between Government and industry. Jointly establish a task group, to examine new opportunities for the industry. (Industry champion: Mike Huggan, BOC-Linde)

Dow confirms closure plan

US group Dow Chemical has insisted it is pressing ahead with plans to close the site in January.

According to nebusiness.co.uk, a consultation period has come to an end and 55 jobs are at risk.

The news seems to confirm what Stan Higgins at NEPIC (North East Process Industry Cluster) and the UK government told me last week. We'll have to wait and see if a white knight emerges to rescue the operation, as some were suggesting (see earlier entries).

Mystery of Third Coast Chemicals' Wilton rescue plan

On Sunday ICIS reported that US-based Third Coast Chemicals was negotiating a takeover of the Dow Chemical ethylene oxide/ethylene glycol (EO/EG) site at Wilton, UK, scheduled for closure in January 2010.

We'd got confirmation of a Sunday Times report from Martin Staley, EMEA vice president for Third Coast who told ICIS: “We’re working with the North East Process Industry Cluster (NEPIC) to see if there’s an opportunity that the plant can be saved.” The company had previously worked on a takeover plan which had stalled in May this year.

However NEPIC CEO Stan Higgins later told ICIS that no negotiations were going on with Third Coast or anyone else. A spokeswoman for the UK’s Department for Business, Innovation and Skills added: “We’re not in any negotiations with Third Coast at the moment. I don’t believe we’re in negotiation with any other parties.”

Higgins was very upset about the Sunday Times report, claiming it gave false hopes to workers at the plant.

Now a source from the EPCA meeting in Berlin insists negotiations are going ahead with Third Coast. Could Dow and Third Coast be secretly negotiating without the knowledge of Stan Higgins at NEPIC and the DBIS? The plot thickens......

Wilton rescue for Dow EO/EG plant by Third Coast Chemical

The Sunday Times reported yesterday that US producer Third Coast Chemicals is in talks to take over the Dow ethylene oxide and ethylene glycol facility at Wilton.
This would be excellent news for Wilton and the UK chemical industry in general.

The Dow plant was the UK's only producer of EO/EG and it is dangerous to transport. The question now is: will Croda now reverse its decision to close the downstream ethoxylates and surfactants plants. It decided to close these in the wake of the Dow closure.

The Times article sated "Ministers are to examine plans to inject tens of millions of pounds into an American-led project to revitalise the chemicals industry in the northeast and save thousands of jobs.

It would see Texas-based Third Coast Chemicals take control of a key plant at the former ICI chemicals complex at Wilton, Teesside. State agencies would provide most of the £50m funding in what is regarded as the first leg of a strategic review by the government of the chemicals industry.

Senior industry sources told The Sunday Times this weekend that the government was in the early stages of formulating an assistance programme to the beleaguered £60 billion-a-year industry. It employs more than 200,000 workers and has been among the worst affected by the recession.

The Department for Business denied that the government had launched a strategic review but it is understood that a team within the Shareholder Executive has begun working on a strategy and has made Wilton a top priority."

Russians beat Americans in European oil deal

Russian oil and chemical group Lukoil has stymied the US' largest oil processing group Valero's attempt to increase its presence in Europe, according to the Tehran Times, quoting Reuters.

Lukoil acquired a 45% stake in a Dutch refining venture Vlissingen refinery from France's Total for $725 m. It can process about 190,000 barrels a day. The purchase came about after Total exercised pre-emption rights over shares previously offered for sale by US group Dow Chemical to Valero.

This shows how keen the Russians still are to boost their European position. They have been trying to grow in chemicals here formany years, but lack of trust seems to have prevented any significant deals being doen, especially in central and eastern Europe.